Million-dollar home under construction in Bern Township by Elite Home Builders.

By David A. KostivalReading Eagle correspondent

When you think of a home valued between $1 million and $2 million, you probably picture properties on the Main Line in Philadelphia or homes in the suburbs surrounding New York City.

But million-dollar homes do exist in Berks County; you just have to look for them.

Mike Chaknos, broker and owner of Century 21 Park Road Real Estate, said million-dollar homes are not commonplace in Berks.

They are scattered across the county, but the majority are in Wyomissing and Spring, Cumru and Exeter townships — in that order, Chaknos said.

It seems the old Realtor adage of location, location, location really does come into play when valuing a home at $1 million.

Chaknos said there used to be two ways to value a million-dollar home.

“The first was reproductive cost analysis — that is, what it would cost to rebuild a home in the current market,” Chaknos said. “Not many appraisers use that today because there is not a strong record of new construction. That method is all but abandoned.”

Chaknos said the only true method is the comparative sales approach: comparing sale prices of similar homes in the area.

Dean Ramich, immediate past president of the Berks County Home Builders Association, said location doesn’t come into play so much when you are talking about the new construction of a high-end house.

“The location of the home is never the driving factor in cost,” Ramich said. “It is all about design and details. When you are building a high-end home, it may be nothing to spend $100,000 on cabinetry and then maybe $70,000 just on tile. Those line items add up quickly.”

But you won’t find too many Berks County builders constructing million-dollar homes right now, Ramich said.

“The feeling I get is the same as what the economists are saying on the news: Companies are keeping their money close at hand right now,” he said. “The people making the decisions for those companies are the ones in the market for the million-dollar homes, and they are also keeping their money to themselves.”

“The market for high-end homes has certainly gotten to be difficult because houses which were previously over the $1 million mark are today teetering in the $800,000 range,” Henn said. “The McMansions have gotten smaller. … Today, the market for high-end homes falls between $450,000 and $800,000.”

Nonetheless, Henn’s company is working on two homes valued at greater than $1 million.

“We’ve been fortunate during this tough period,” Henn said. “We still have successful professionals moving in from out of town who are looking for us to build them a house.”

Even though location doesn’t play a big role for new construction, Henn said there is no such thing as a typical million-dollar house.

“It’s difficult to say what a million-dollar home looks like because the buyer is basically tailoring the internals of the house to their own needs,” he said. “But most are stone and stucco, and on the inside you will find $100,000 kitchens and expensive floor coverings.”

Henn said common external features usually include a long driveway and stone retaining walls.

Both Henn and Ramich said any builder constructing a home valued at $1 million is doing so for an existing customer.

“Building a home and then ‘spec-ing’ it at $1 million would probably be a difficult sell,” Henn said.

Chaknos said that’s not necessarily the case for existing houses.

“It’s a very interesting market because it is unique for our area,” Chaknos said. “The values are very attractive and the money is cheap. You can buy a million-dollar home for the same monthly amount that you previously paid for a $750,000 home.”

And, he added, “It’s not a dead market because there are buyers out there.”

Did you know?

If you buy a $1.25 million home and you put 20 percent, or $250,000, down, a 30-year fixed loan at 5 percent interest on $1 million would equal a monthly mortgage payment of $5,370 plus property taxes.

Also, interest rates on million-dollar loans are higher than the market rates for properties under $417,000. Those loans are known as conforming loans, while loans greater than $417,000 are known as jumbo loans and require higher interest.

— Mike Chaknos, broker and owner

of Century 21 Park Road Real Estate

What does $1 million buy?

Here’s a sampling of some of the high-end homes on the market now. Some offer lots of land.

Some have a ton of space. All have owners hoping to find a buyer.

Location: Red Corner Road, Douglassville.

What it costs: $1.96 million.

2011 property tax: $27,333.

What it has: 37.39 acres; 6,843 square feet; six bedrooms and six baths.